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Will interest rate rises take the wind out of the Ealing market's sails?

  • main chart
  • The most recent Rightmove and Zoopla House Price Indices record different directions of travel for the UK property market. Whilst the September Zoopla HPI shows an increase of 0.6% in the annual rate of price growth, Rightmove record a 0.6% fall for the following month of October. However, both Zoopla and Rightmove put the annual change at very similar rates of 6.6% and 6.3% respectively.

    Whilst Zoopla's valuation for September stands at £235,000, Rightmove put the average asking price of a home in the UK at £342,401. Because Rightmove's figures are based on asking rather than actual sold prices, they are an interesting barometer of market sentiment. Their interpretation of the fall is that it is driven by a desire to tempt buyers who would otherwise wait until after Christmas.

    Both reports focus on their predictions for the coming few months. Rightmove comment that although December is traditionally a quiet month for the property market, some buyers will be keen to beat the expected rise in interest rates and conclude a purchase this side of Christmas. They note that, compared to this time last year, there has been a 14% rise in property valuations being requested, which they see as an indication that there will be a boom in the number of properties coming onto the market after Christmas. Rightmove expect that the combination of the usual post-Christmas surge in house-hunting, together with the growth in supply, will result in a very active market in the new year.

    Zoopla look further ahead into 2022 and point to both positive and negative factors that will affect the market. They predict that competition amongst mortgage lenders and a continued lack of housing stock will act to support further price growth. Demand will be stimulated by sellers who are encouraged by the rise in the value of their home over the last couple of years and the continued desire of many people to move to larger homes to accommodate post-pandemic lifestyles. However, the increased cost of living that is already being experienced in the UK, together with a rise in interest rates, will act against prices rising as they have done in 2021. Their overall prediction is that prices will continue to grow but at a slower pace.

    In the last 12 months, there have been 551 property transactions in Ealing. This compares with 558 in the previous year, showing a fall of 1.3%.

    Zoopla predict that mortgage rates could reach 3% by the end of 2022. Whilst this may not be a large enough increase to affect prices, they say it could mean that would-be buyers are deterred and sales will fall. After the record level of sales in 2021, they predict that transactions could fall by 20% in 2022 to settle at the long-term average.

"In the last 12 months, there have been 551 property transactions in Ealing."

chart 1

An index of sales split by house and flats

This chart shows how sales levels in the local area sit now compared with seven months ago. We've indexed all property types so they start at the same point so you can easily see how they've moved in relation to each other.

An index of prices by type over time

Over the last two years, we've seen pretty strong performance in the local market. We wanted to see how different property types have performed, so we indexed the values at the start of the period. Property data updates quite slowly, so we've estimated the last 3 months.
chart 2
chart 3

Local house types

Property types are a handy measure of the shape of the market in a local area. For example, areas with lots of flats tend to be urban in character because there is huge pressure on land. A large number of detached homes means that the area is suburban and not very densely populated.

What’s going on in the market?

  • Average price for a home
    £
    in
  • How much have average prices changed?

    %
    in the last year
    %
    in the last 5 years

    What’s the average price per square foot?

    £ psf

    What’s the average price for a new home?

    £

Sales Market in

How many homes changed hands?

in the last year

Sales numbers have changed by

year-on-year

Average price in England & Wales

Average price in London

By property type Apartments Terraced Semi-detached Detached
 

Average price

Price change

last 12 months

Proportion of all sales

XX

Lettings Market in

What is the average rent for a house?

per month

What is the average rent for a flat?

per month

Rents have changed by

in the last 12 months

What is the average rental yield?

gross annual yield

What is the average age of local residents?

How old are first-time buyers on average?

What price point marks the top 5%?